Scandal and Headlines Could it Happen to Your Facilities - - PowerPoint PPT Presentation

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Scandal and Headlines Could it Happen to Your Facilities - - PowerPoint PPT Presentation

Scandal and Headlines Could it Happen to Your Facilities Organization? APPA Boston 2010 New Mexico State University Presenters Angela Throneberry Associate Vice President


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SLIDE 1

Scandal and Headlines

Could it Happen to Your Facilities Organization?

APPA • Boston • 2010 New Mexico State University

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SLIDE 2

(2)

Presenters

  • Angela Throneberry

Associate Vice President of Business, Finance, and Human Resources

  • Glen Haubold

Assistant Vice President of Facilities and Services

APPA • Boston • 2010 New Mexico State University

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SLIDE 3

(3)

Learning Outcomes

  • What are the warning signs?

– A checklist for your organization

APPA • Boston • 2010 New Mexico State University

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SLIDE 4

(4)

Learning Outcomes

  • Impact of financial best practices on

Facilities Management workflows

– Consider impact of controls on service delivery – What level of risk is acceptable?

APPA • Boston • 2010 New Mexico State University

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SLIDE 5

(5)

Learning Outcomes

  • Actions to combat that pervasive sense of

entitlement

  • Ways to initiate culture change

APPA • Boston • 2010 New Mexico State University

slide-6
SLIDE 6

(6)

Personal Note

  • You shouldn’t wonder if scandal is possible
  • Rather, is the level of risk acceptable?

APPA • Boston • 2010 New Mexico State University

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SLIDE 7

(7)

Learning Outcome #1

  • It’s much easier and a lot less painful to

conduct an internal audit than to read about it in the newspapers

APPA • Boston • 2010 New Mexico State University

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SLIDE 8

(8)

NMSU

  • New Mexico’s land grant institution
  • Comprised of six academic colleges and a

graduate school

  • Offers undergraduate, graduate, and

professional degree-granting programs

APPA • Boston • 2010 New Mexico State University

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SLIDE 9

(9)

NMSU Demographics

  • 97th out of 657 institutions in terms of

federal research and development

APPA • Boston • 2010 New Mexico State University

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SLIDE 10

(10)

NMSU Demographics

  • The Department of Chemistry and

Biochemistry ranked 43rd out of 157 Ph.D.- granting institutions in federal research funding awards

APPA • Boston • 2010 New Mexico State University

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SLIDE 11

(11)

NMSU Demographics

  • NMSU FY2010 -

– $612 million operating funds FY 2010 – $84 million capital outlay FY 2010

APPA • Boston • 2010 New Mexico State University

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SLIDE 12

(12)

NMSU Headcount by Campus

Students Faculty Staff Alamogordo 3,474 125 138 Carlsbad 1,998 92 110 Doña Ana 8,796 415 286 Grants 1,385 65 45 Las Cruces 18,497 1,215 3,360

NMSU Unduplicated Student Headcount 29,468

APPA • Boston • 2010 New Mexico State University

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SLIDE 13

(13)

NMSU

  • NMSU football team
  • Western Athletic Conference (WAC)

– Won 3 Lost 10

APPA • Boston • 2010 New Mexico State University

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SLIDE 14

(14)

NMSU Facilities Demographics

  • 288 buildings
  • 3,106,670 Institutional & General sq ft
  • 5,283,294 sq ft including Auxiliaries
  • 1,125 acres
  • 425 maintained acres

APPA • Boston • 2010 New Mexico State University

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SLIDE 15

(15)

NMSU Facilities Demographics

  • 230 + staff in Operations and Maintenance
  • 300 total FTE in Facilities
  • $12 million operating
  • $5 million recovery / reimbursable
  • $5 million deferred maintenance (BRR)

APPA • Boston • 2010 New Mexico State University

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SLIDE 16

(16)

Allegations

  • Timekeeping abuse

– Supervisor / employee collusion – Excessive overtime

  • Personal use of equipment and materials

APPA • Boston • 2010 New Mexico State University

slide-17
SLIDE 17

(17)

Allegations

  • Project cost overruns

– Rate issues – Tied in with OT abuse – Excess materials

APPA • Boston • 2010 New Mexico State University

slide-18
SLIDE 18

(18)

How was the behavior discovered?

  • Whistleblower

– Elevated to the President

APPA • Boston • 2010 New Mexico State University

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SLIDE 19

(19)

Headlines

  • Played out in newspaper
  • Campus focus

APPA • Boston • 2010 New Mexico State University

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SLIDE 20

(20)

A question:

  • Could it happen in my organization?

– Is it happening already?

APPA • Boston • 2010 New Mexico State University

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SLIDE 21

(21)

The question:

  • Will I have the information I need to hold

people accountable when I find out?

– And how will I find out?

APPA • Boston • 2010 New Mexico State University

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SLIDE 22

(22)

Areas for improvement

  • Management by memo
  • Strayed from core mission
  • Inadequate reports
  • Absence of checks and balances
  • “The way we’ve always done it”

APPA • Boston • 2010 New Mexico State University

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SLIDE 23

(23)

Targeted Areas

  • Procedures
  • Financial controls and reports
  • Leadership

APPA • Boston • 2010 New Mexico State University

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SLIDE 24

(24)

Procedures

APPA • Boston • 2010 New Mexico State University

If you think it’s expensive to hire a professional

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SLIDE 25

(25)

Procedures

APPA • Boston • 2010 New Mexico State University

Wait until you hire an amateur

  • Red Adair
slide-26
SLIDE 26

(26)

Procedures

  • Procedures should be clearly stated in

writing, systematically organized, and properly approved

– Or is management by memo used? – Is review process adequate?

APPA • Boston • 2010 New Mexico State University

slide-27
SLIDE 27

(27)

Procedures

  • Procedures should be systematically

communicated to all officials and appropriate employees of the organization

– Are they accessible? – Do you discuss in staff meetings? – Are they understood?

APPA • Boston • 2010 New Mexico State University

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SLIDE 28

(28)

Procedures

  • Procedures should be coordinated so that
  • ne employee’s work is automatically

checked by another who is independently performing separate prescribed duties

– Call out verification by plant – Business office overtime checks – Utilize central support services

APPA • Boston • 2010 New Mexico State University

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SLIDE 29

(29)

Procedure Checklist

  • Procurement of supplies through the

warehouse and the procurement system?

  • Regular inventories of small tools and shop

stock?

  • Procurement card, fuel card, and petty cash

purchases?

  • Is physical security of assets adequate?

APPA • Boston • 2010 New Mexico State University

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SLIDE 30

(30)

Procedure Checklist

  • Intra- and inter-departmental use of

equipment?

  • Job estimation and planning?
  • Operation of the Work Order System

including defined administrative and security roles? A written procedure for adjustments?

APPA • Boston • 2010 New Mexico State University

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SLIDE 31

(31)

Procedure Checklist

  • Employee and supervisor review of

timesheets?

  • The use of cell phones and the operation of

vehicles?

  • Conflict of interest and outside

employment?

APPA • Boston • 2010 New Mexico State University

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SLIDE 32

(32)

Questions to Ask

  • Are frequent, documented, training and

review sessions conducted?

APPA • Boston • 2010 New Mexico State University

slide-33
SLIDE 33

(33)

Questions to Ask

  • Are management and supervisor reports

appropriately distributed and employees properly trained on how to use the information?

APPA • Boston • 2010 New Mexico State University

slide-34
SLIDE 34

(34)

Questions to Ask

  • Is everyone clear about timekeeping and

how travel time, training, and “shop time” are calculated on work orders and billed?

APPA • Boston • 2010 New Mexico State University

slide-35
SLIDE 35

(35)

Questions to Ask

  • Is our organization consistent with how

projects funded through state appropriations and with research grants are billed for work?

APPA • Boston • 2010 New Mexico State University

slide-36
SLIDE 36

(36)

Questions to Ask

  • Do our staff and customers understand

what constitutes billable and non-billable work? Do we have a published schedule of services and rates?

APPA • Boston • 2010 New Mexico State University

slide-37
SLIDE 37

(37)

Questions to Ask

  • Are markups and shop labor rates

developed in accordance with Office of Management and Budget A21 Guidelines and periodically reviewed by the appropriate central administrative unit?

APPA • Boston • 2010 New Mexico State University

slide-38
SLIDE 38

(38)

Questions to Ask

  • Do we have clear procedures about

callouts, scheduled overtime, and overtime approvals? Is there a method in place to conduct spot checks of hours worked?

APPA • Boston • 2010 New Mexico State University

slide-39
SLIDE 39

(39)

Questions to Ask

  • Are there guidelines in place regarding

vendor relations?

APPA • Boston • 2010 New Mexico State University

slide-40
SLIDE 40

(40)

Questions to Ask

  • Do we have an established process to

encourage confidential reporting? Is it publicized?

APPA • Boston • 2010 New Mexico State University

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SLIDE 41

(41)

Financial Controls and Reports

APPA • Boston • 2010 New Mexico State University

slide-42
SLIDE 42

(42)

Accounting Controls & Management Reporting

  • Risk management and risk assessment

processes help focus efforts and prioritize

– High level financial overview to identify target areas – Weaknesses and deficiencies are often consistent in other areas

APPA • Boston • 2010 New Mexico State University

slide-43
SLIDE 43

(43)

Accounting Controls & Management Reporting

  • Control Environment - The overall control

tone of the organization

– What is management’s operating philosophy and is it practiced?

APPA • Boston • 2010 New Mexico State University

slide-44
SLIDE 44

(44)

Accounting Controls & Management Reporting

  • Risk Assessment - The process used to

identify, measure, evaluate, and prioritize risks that may affect an organization’s ability to achieve established objectives.

– Have agreed upon goals and objectives been established?

APPA • Boston • 2010 New Mexico State University

slide-45
SLIDE 45

(45)

Accounting Controls & Management Reporting

  • Control Activities - The policies and

procedures established to assist in accomplishing objectives

– Is the acceptable level of risk identified? – Are the checks and balances sufficient?

APPA • Boston • 2010 New Mexico State University

slide-46
SLIDE 46

(46)

Accounting Controls & Management Reporting

  • Information & Communication - Provides

for the identification, establishment and delivery of information and data to assist in accomplishing objectives

– Do employees have all the information they need to do their jobs?

APPA • Boston • 2010 New Mexico State University

slide-47
SLIDE 47

(47)

Accounting Controls & Management Reporting

  • Monitoring - The process of assessing the

quality and effectiveness of the established internal controls.

– Are the established controls working as intended?

APPA • Boston • 2010 New Mexico State University

slide-48
SLIDE 48

(48)

Accounting Controls & Reporting

  • Visible support and changes
  • Established a foundation
  • Demonstrated commitment to

accountability and ethics

  • Opened facilities “operational doors”
  • Set the “tone at the top”

APPA • Boston • 2010 New Mexico State University

slide-49
SLIDE 49

(49)

Leadership & Culture Change

APPA • Boston • 2010 New Mexico State University

slide-50
SLIDE 50

(50)

Organizational Culture

  • How the organization functions
  • How things get done
  • Must understand it first

APPA • Boston • 2010 New Mexico State University

slide-51
SLIDE 51

(51)

Culture Change & Entitlement

APPA • Boston • 2010 New Mexico State University

slide-52
SLIDE 52

(52)

Culture Change

  • Starts at the top
  • Need to know where you’re going
  • Review organizational structure
  • Selection and evaluations
  • Mission and value statements

APPA • Boston • 2010 New Mexico State University

slide-53
SLIDE 53

(53)

Culture Change

  • Be patient
  • Remember the ‘tipping point’

– the levels at which the momentum for change becomes unstoppable (Bryan Walsh) – Term first coined by Morton Grodzins

  • Communications and Communications

APPA • Boston • 2010 New Mexico State University

slide-54
SLIDE 54

(54)

Sense of Entitlement

  • It starts with you!
  • Develop accurate perceptions of

management goals and behaviors

  • Facilities is in a position to be a campus

leader

APPA • Boston • 2010 New Mexico State University

slide-55
SLIDE 55

(55)

Accountability

  • Procedures
  • Financial controls and reports
  • Leadership

= ACCOUNTABILITY

APPA • Boston • 2010 New Mexico State University

slide-56
SLIDE 56

(56)

Accountability

APPA • Boston • 2010 New Mexico State University

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SLIDE 57

(57)

Questions?

APPA • Boston • 2010 New Mexico State University

slide-58
SLIDE 58

(58)

Leadership

  • #1 value in study after study -

TRUST OUR LEADERS TO DO THE RIGHT THING

APPA • Boston • 2010 New Mexico State University

slide-59
SLIDE 59

(59)

Thank You!

Angela Throneberry

athroneb@nmsu.edu

Glen Haubold

ghaubold@nmsu.edu

APPA • Boston • 2010 New Mexico State University

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SLIDE 60

The Accountant and the Engineer

Angela Throneberry Glen Haubold

slide-61
SLIDE 61

Presenters

  • Angela Throneberry

Associate Vice President of Business, Finance, and Human Resources

  • Glen Haubold

Assistant Vice President of Facilities and Services

(2)

slide-62
SLIDE 62

Learning Outcomes

  • Use metrics and comparative data to

measure organizational performance and identify areas for improvement

(3)

slide-63
SLIDE 63

Learning Outcomes

  • Discuss approaches to initiating culture

change

(4)

slide-64
SLIDE 64

Learning Outcomes

  • Ideas and actions to combat that pervasive

sense of entitlement that leads to the rationalization for theft and fraud

  • Questions to ask of your Facilities
  • rganization

(5)

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SLIDE 65

Personal Note

  • You shouldn’t wonder if scandal is possible
  • Rather, is the level of risk acceptable?

(6)

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SLIDE 66

What the engineers think

(7)

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SLIDE 67

What the accountants think

(8)

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SLIDE 68

Learning Outcome #1

  • It’s much easier and a lot less painful to

conduct an internal audit than to read about it in the newspapers

  • Must work together to accomplish this goal

(9)

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SLIDE 69

NMSU

  • New Mexico’s land grant institution
  • Groundbreaking research in biosciences,

natural resources, aerospace, information sciences and U.S.-Mexico border development

(10)

slide-70
SLIDE 70

NMSU Demographics

  • 97th out of 657 institutions in terms of

federal research and development

(11)

slide-71
SLIDE 71

NMSU Demographics

  • NMSU FY2010 -
  • $612 million operating funds FY 2010
  • $84 million capital outlay FY 2010

(12)

slide-72
SLIDE 72

Headcount by Campus

Students Faculty Staff Alamogordo 3,474 125 138 Carlsbad 1,998 92 110 Doña Ana 8,796 415 286 Grants 1,385 65 45 Las Cruces 18,497 1,215 3,360

NMSU Unduplicated Student Headcount 29,468

(13)

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SLIDE 73

NMSU

  • NMSU football team
  • Western Athletic Conference (WAC)
  • Won 3 Lost 10

(14)

slide-74
SLIDE 74

Facilities Demographics

  • 288 buildings
  • 3,106,670 Institutional & General sq ft
  • 5,283,294 sq ft including Auxiliaries
  • 1,125 acres
  • 425 maintained acres

(15)

slide-75
SLIDE 75

Facilities Demographics

  • 230 + staff in Operations and Maintenance
  • 300 total FTE in Facilities
  • $12 million operating
  • $5 million recovery / reimbursable
  • $5 million deferred maintenance (BRR)

(16)

slide-76
SLIDE 76

Allegations

  • Timekeeping abuse
  • Supervisor / employee collusion
  • Excessive overtime
  • Personal use of equipment and materials

(17)

slide-77
SLIDE 77

Allegations

  • Project cost overruns
  • Rate issues
  • Tied in with OT abuse
  • Excess materials

(18)

slide-78
SLIDE 78

How was the behavior discovered?

  • Whistleblower
  • Elevated to the President

(19)

slide-79
SLIDE 79

Headlines

  • Played out in newspaper
  • Campus focus

(20)

slide-80
SLIDE 80

A question:

  • Could it happen in my organization?
  • Is it happening already?

(21)

slide-81
SLIDE 81

The question:

  • Will I have the information I need to hold

people accountable when I find out?

  • And how will I find out?

(22)

slide-82
SLIDE 82

Areas for improvement

  • Management by memo
  • Strayed from core mission
  • Inadequate reports
  • Absence of checks and balances
  • “The way we’ve always done it”

(23)

slide-83
SLIDE 83

Targeted Areas

  • Procedures
  • Financial controls and reports
  • Leadership

(24)

slide-84
SLIDE 84

Procedures

If you think it’s expensive to hire a professional

(25)

slide-85
SLIDE 85

Procedures

Wait until you hire an amateur

  • Red Adair

(26)

slide-86
SLIDE 86

Procedures

  • Procedures should be clearly stated in

writing, systematically organized, and properly approved

  • Or is management by memo used?
  • Is review process adequate?
  • Are they adequately maintained and updated?

(27)

slide-87
SLIDE 87

Procedures

  • Procedures should be systematically

communicated to all officials and appropriate employees of the

  • rganization
  • Are they accessible?
  • Do you discuss in staff meetings?
  • Are they understood?

(28)

slide-88
SLIDE 88

Procedures

  • Procedures must incorporate Internal

Controls

  • Coordinate so one employee’s work is

checked by another performing separate prescribed duties

  • Call out verification by plant
  • Business office overtime checks
  • Utilize central support services

(29)

slide-89
SLIDE 89

Procedure Checklist

  • Procurement of supplies through the

warehouse and the procurement system?

  • Regular inventories of small tools and

shop stock?

  • Procurement card, fuel card, and petty

cash purchases?

  • Is physical security of assets adequate?

(30)

slide-90
SLIDE 90

Procedure Checklist

  • Intra- and inter-departmental use of

equipment?

  • Job estimation and planning?
  • Operation of the Work Order System

including defined administrative and security roles? A written procedure for adjustments?

(31)

slide-91
SLIDE 91

Procedure Checklist

  • Employee and supervisor review of

timesheets?

  • The use of cell phones and the operation of

vehicles?

  • Conflict of interest and outside

employment?

(32)

slide-92
SLIDE 92

Questions to Ask

  • Are frequent, documented, training and

review sessions conducted?

(33)

slide-93
SLIDE 93

Questions to Ask

  • Are management and supervisor reports

appropriately distributed and employees properly trained on how to use the information?

(34)

slide-94
SLIDE 94

Questions to Ask

  • Is everyone clear about timekeeping and

how travel time, training, and “shop time” are calculated on work orders and billed?

(35)

slide-95
SLIDE 95

Questions to Ask

  • Is our organization consistent with how

projects funded through state appropriations and with research grants are billed for work?

  • How do you verify?

(36)

slide-96
SLIDE 96

Questions to Ask

  • Do our staff and customers understand

what constitutes billable and non-billable work? Do we have a published schedule of services and rates?

(37)

slide-97
SLIDE 97

Questions to Ask

  • Are markups and shop labor rates

developed in accordance with Office of Management and Budget A21 Guidelines and periodically reviewed by the appropriate central administrative unit?

(38)

slide-98
SLIDE 98

Questions to Ask

  • Do we have clear procedures about callouts,

scheduled overtime, and overtime approvals? Is there a method in place to conduct spot checks of hours worked?

(39)

slide-99
SLIDE 99

Questions to Ask

  • Are there guidelines in place regarding

vendor relations?

(40)

slide-100
SLIDE 100

Questions to Ask

  • Do we have an established process to

encourage confidential reporting? Is it publicized?

(41)

slide-101
SLIDE 101

Financial Controls and Reports

(42)

slide-102
SLIDE 102

Accounting Controls & Management Reporting

  • Risk management and risk assessment

processes help focus efforts and prioritize

  • High level financial overview to identify target areas
  • Weaknesses and deficiencies are often consistent in
  • ther areas

(43)

slide-103
SLIDE 103

Accounting Controls & Management Reporting

  • Control Environment - The overall control

tone of the organization

  • What is management’s operating philosophy and is it

practiced?

(44)

slide-104
SLIDE 104

Accounting Controls & Management Reporting

  • Risk Assessment - The process used to

identify, measure, evaluate, and prioritize risks that may affect an organization’s ability to achieve established objectives.

  • Have agreed upon goals and objectives been

established?

(45)

slide-105
SLIDE 105

Accounting Controls & Management Reporting

  • Control Activities - The policies and

procedures established to assist in accomplishing objectives

  • Is the acceptable level of risk identified?
  • Are the checks and balances sufficient?

(46)

slide-106
SLIDE 106

Accounting Controls & Management Reporting

  • Information & Communication - Provides for

the identification, establishment and delivery of information and data to assist in accomplishing objectives

  • Do employees have all the information they need to

do their jobs?

(47)

slide-107
SLIDE 107

Accounting Controls & Management Reporting

  • Monitoring - The process of assessing the

quality and effectiveness of the established internal controls.

  • Are the established controls working as intended?

(48)

slide-108
SLIDE 108

Metrics

(49)

slide-109
SLIDE 109

Metrics / Facilities

  • Administrative
  • Construction
  • Custodial
  • Energy
  • Grounds
  • Maintenance

(50)

slide-110
SLIDE 110

Metrics / Facilities

  • FTE and Expense
  • Per Student FTE
  • Per GSF
  • Percentage of I&G

(51)

slide-111
SLIDE 111

Comparisons / Reports

  • Internal Comparisons
  • Budget To Actuals
  • Billable vs. Non-Billable Work/Hours
  • OT Hours
  • Rates

(52)

slide-112
SLIDE 112

Comparisons / Reports

  • External Comparisons & Best Practices
  • APPA – Facilities Performance Indicator Study
  • Custodial Services
  • Grounds
  • Warehouse Operations
  • Facilities – Capital Investment and Operations

(53)

slide-113
SLIDE 113

Accounting Controls & Reporting

  • Visible support and changes
  • Established a foundation
  • Demonstrated commitment to

accountability and ethics

  • Opened facilities “operational doors”
  • Set the “tone at the top”

(54)

slide-114
SLIDE 114

Leadership & Culture Change

(55)

slide-115
SLIDE 115

Organizational Culture

  • How the organization functions
  • How things get done
  • Must understand it first

(56)

slide-116
SLIDE 116

Culture Change & Entitlement

(57)

slide-117
SLIDE 117

Culture Change

  • Starts at the top
  • Need to know where you’re going
  • Review organizational structure
  • Selection and evaluations
  • Mission and value statements

(58)

slide-118
SLIDE 118

Culture Change

  • Be patient
  • Remember the ‘tipping point’
  • the levels at which the momentum for change

becomes unstoppable (Bryan Walsh)

  • Term first coined by Morton Grodzins
  • Communications and Communications

(59)

slide-119
SLIDE 119

Sense of Entitlement

  • It starts with you!
  • Develop accurate perceptions of

management goals and behaviors

  • Facilities is in a position to be a campus

leader

(60)

slide-120
SLIDE 120

Accountability

  • Procedures
  • Financial controls and reports
  • Leadership

= ACCOUNTABILITY

(61)

slide-121
SLIDE 121

Accountability

(62)

slide-122
SLIDE 122

Teamwork

  • No one can whistle a symphony. It takes

an orchestra to play it.

  • H.E. Luccock

(63)

slide-123
SLIDE 123

Questions?

(64)

slide-124
SLIDE 124

Leadership

  • #1 value in study after study -

TRUST OUR LEADERS TO DO THE RIGHT THING

(65)

slide-125
SLIDE 125

Thank You!

Angela Throneberry

athroneb@nmsu.edu

Glen Haubold

ghaubold@nmsu.edu

(66)